[Federal Register Volume 64, Number 193 (Wednesday, October 6, 1999)]
[Notices]
[Pages 54358-54361]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-25956]


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DEPARTMENT OF LABOR

Occupational Safety and Health Administration
[Docket No. W-100]


Proposed Policy Statement Concerning the Occupational Safety and 
Health Administration's Use of Voluntary Employer Safety and Health 
Self-Audits

    Authority: Sec. 8(a) and 8(b), Pub. L. 91-596, 84 Stat. 1599 (29 
U.S.C. 657).

AGENCY: Occupational Safety and Health Administration, USDOL.

ACTION: Notice of proposed policy statement; request for comment.

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SUMMARY: The Occupational Safety and Health Administration (OSHA) is 
issuing a proposed policy statement describing the agency's treatment 
of voluntary employer self-audits that assess workplace safety and 
health conditions, including compliance with the Occupational Safety 
and Health Act. The proposed policy statement provides that the agency 
will not routinely request self-audit reports at the initiation of an 
inspection. Where a voluntary self-audit identifies a hazardous 
condition and the employer promptly takes self-audit reports at the 
initiation of an inspection. Where a voluntary self-audit identifies a 
hazardous condition and the employer promptly takes appropriate 
corrective measures, OSHA will treat the audit report as evidence of 
good faith, and not as evidence of a willful violation. OSHA requests 
public comment regarding it proposed policy statement.

DATES: Written comments must be submitted on or before December 6, 
1999.

ADDRESSES: Send two copies of your comments to: OSHA Docket Office, 
Docket W-100, Room N-2625, Occupational Safety and Health 
Administration, U.S. Department of Labor, 200 Constitution Avenue NW, 
Washington, D.C. 20210, Telephone: 202-693-2350. Comments limited to 10 
pages or fewer may be faxed to the Docket Office at the following FAX 
number: 202-693-1648. However, the original and one copy must be mailed 
to the Docket Office within two days. Electronic comments may also be 
submitted electronically through the OSHA Internet site at URL, http://
www.osha-slc.gov/e-comments/e-comments-self-audit.html. Please be aware 
that information such as studies, journal articles, and so forth cannot 
be attached to the electronic response and must be submitted in 
quadruplicate to

[[Page 54359]]

the above address. Such attachments must clearly identify the 
respondent's electronic submission by name, date, and subject, so that 
they can be attached to the correct response.

FOR FURTHER INFORMATION CONTACT: Richard E. Fairfax, Occupational 
Safety and Health Administration, Directorate of Compliance Programs, 
Room N-3468, U.S. Department of Labor, 200 Constitution Avenue, NW, 
Washington, D.C. 20210, Telephone: 202-693-2100. For electronic copies, 
contact OSHA's web page on the Internet at http://www.osha.gov.

SUPPLEMENTARY INFORMATION: 

I. Explanation of the Proposed Policy

    The purpose of the Occupational Safety and Health Act is to assure, 
so far as possible, safe and healthful working conditions for every 
working man and woman in the Nation. In order to achieve that goal, the 
Act requires employers to furnish their employees with employment which 
is free from recognized hazards that are likely to cause death or 
serious physical harm, and to comply with occupational safety and 
health standards issued by the Secretary of Labor. Some courts have 
inferred from these requirements that employers have an implicit duty 
to scrutinize their workplaces to identify and correct hazardous 
conditions. See Dunlop v. Rockwell International. 540 F.2d 1283, 1291-
92 (6th Cir. 1976); Automatic Sprinkler Corp. of America, 7 BNA OSHC 
1957, 1959 (OSH Review Commission 1979). OSHA also has included an 
explicit requirement in many standards that employers self-inspect to 
determine compliance. See, e.g., 29 CFR 1926.20(b) (requiring 
``frequent and regular'' inspections of construction sites); 29 CFR 
1910.119 (mandating compliance audits and other inspections and 
investigations for operations with hazardous chemicals); 29 CFR 
1910.120 (requiring audits and other reviews for operations with 
hazardous waste products); and 29 CFR 1910.1025(d), (e) (mandating 
monitoring and planning to evaluate and to reduce employee exposure to 
lead).
    In addition to required self-audits, many conscientious employers 
undertake voluntary self-audits in order to foster safe and healthful 
work environments and to assure compliance with the Occupational Safety 
and Health Act. For a number of years, OSHA, employers, employee 
representatives, and other interested parties have considered the role 
that these voluntary employer self-audits play in meeting the goals of 
the Act. The purpose of this proposed policy is to provide general 
guidance regarding the circumstances in which OSHA intends to exercise 
its authority to obtain voluntary self-audit reports during the course 
of an inspection, and the manner in which the agency will use voluntary 
self-audits when it classifies violations of the Occupational Safety 
and Health Act and when it proposes penalties for such violations. The 
agency indends that the policy will recognize the value of voluntary 
self-audit programs under which employers or their agents identify and 
promptly correct hazardous conditions and will acknowledge that, in 
limited situations, records relating to voluntary self-audits play an 
important role in the agency, ability to effectively carry out its 
inspection and enforcement duties under the Occupational Safety and 
Health Act.
    OSHA recognizes the vital part that voluntary safety and health 
audits can play in workplace safety and health when employers use them 
to identify workplace hazards and take the corrective actions needed to 
control such hazards. OSHA also notes that safety and health audits--
when they lead to appropriate corrective action--can provide 
significant economic benefits for employers by reducing the myriad 
direct and indirect costs that are associated with occupational 
injuries and illnesses. These costs include workers' compensation, 
indemnification and medical payments, sick leave, and lost 
productivity. Further, voluntary safety and health audits produce 
tangible benefits for employers who seek to avoid OSHA enforcement 
actions by identifying conditions that constitute violations of the 
Occupational Safety and Health Act and by providing employers with the 
opportunity to rectify those conditions prior to the time that OSHA 
inspects the work site. A good self-audit program should be especially 
effective in detecting and preventing the ``high gravity'' and 
``repeated'' violations that carry the highest penalties.
    It is also the case the documentation derived from employers may be 
of critical importance during an OSHA inspection, as the agency 
attempts to ascertain whether an employer is in compliance with the 
Occupational Safety and Health Act and the standards promulgated under 
that Act. In addition, the legal burden to establish an employer's 
actual or constructive knowledge of a violative condition rests with 
the Secretary of Labor under current Occupational Safety and Health 
Review Commission precedent and the Secretary is required consider the 
classification of each violation and to consider the employer's good 
faith in setting an appropriate monetary penalty. Therefore, OSHA 
relies, in part, on evidence concerning the employer's safety and 
health efforts and the employer's state of mind to discharge is duty to 
enforce the Occupational Safety and Health Act fairly and effectively.
    OSHA has broad legal authority to request the production of 
documentation concerning an employer's voluntarily conducted safety and 
health audits. See 29 U.S.C. 657(b); Reich v. Hercules, Inc., 857 F. 
Supp. 367 (D.N.J. 1994); Martin v. Hammermill Paper Division of Int'l. 
Paper Co., 796 F. Supp. 1474 (S.D. Ala. 1992). Employers generally 
recognizes that OSHA has legal authority to obtain self-audit reports, 
but some have urged the agency to issue a policy statement clarifying 
that it does not intend to exercise that authority routinely.
    While many employers conduct voluntary safety and health audits, 
some employers have expressed concern that OSHA's enforcement powers, 
and the absence of an explicit policy statement recognizing the value 
of voluntary self-audits, could deter employers from undertaking 
voluntary self-auditing activities. Specifically, employers have raised 
concerns that, if OSHA routinely seeks to obtain employers' voluntary 
safety and health audit reports for enforcement purposes, some 
employers might choose not to conduct such audits. This policy 
statement is designed to convey clearly OSHA's policy and practices 
concerning voluntary self-audits.

II. Description of Proposed Policy

    The draft policy applies to audits (1) that are systematic, 
documented, and objective reviews conducted by, or for, employers to 
review their operations and practices to ascertain compliance with the 
Act, and (2) that are not mandated by the Act, rules or orders issued 
pursuant to the Act, or settlement agreements. A systematic audit is 
planned, and it is designed to be appropriate to the scope of the 
hazards that it addresses and to provide a basis for corrective action. 
Ad hoc observations made by an employer or a supervisor and ad hoc 
communications concerning a hazardous condition made during the 
ordinary course of business are not included within the definition of a 
``self-audit'' or ``voluntary self-audit report.'' The findings 
resulting from the systematic self-audit must be documented 
contemporaneously (at the time the condition is discovered or 
immediately after completion of the audit) so as to assure that they 
receive prompt attention. The self-audit also must be conducted by or 
supervised by

[[Page 54360]]

a competent professional, who is capable of identifying the relevant 
workplace hazards. However, a self-audit need not be comprehensive in 
order to qualify for inclusion under the policy; for example, a 
voluntary self-audit designed to identify hazards associated with a 
particular process or hazard will qualify for consideration under the 
policy.
    The policy provides that OSHA will not routinely request voluntary 
self-audit reports when initiating an inspection, and that the agency 
will not use self-audit reports as a means of identifying hazards upon 
which to focus during an inspection. Rather, OSHA intends to seek 
access to such reports only in limited situations in which the agency 
has an independent basis to believe that a specific safety or health 
hazard warrants investigation, and has determined that such records may 
be relevant to identify or determine the circumstances of the hazardous 
condition.
    An example of such a situation is when a fatal or catastrophic 
accident has occurred, and OSHA is investigating the circumstances of 
the accident to assess compliance and to assure that hazardous 
conditions are abated. Another example is when the agency has reason to 
believe a hazardous non-complying condition exists and the agency is 
seeking to evaluate the extent of the hazard.
    OSHA emphasizes that it is not seeking through this policy 
statement to expand the situations in which it requests production of 
self-audit reports beyond its present practice. In addition, OSHA 
intends to seek access only to those audit reports, or portions of 
those reports, that are relevant to the particular matters that it is 
investigating.
    OSHA has defined ``voluntary self-audit report'' to include 
information obtained in the audit, as well as analyses and 
recommendations. The effect is to include audit information in the 
documents that OSHA will not routinely request at the initiation of the 
inspection. OSHA has defined the term this way because the agency 
believes that the definition responds to the concerns raised by 
employers about the effect of routine OSHA requests for voluntary self-
audit findings. OSHA notes that the U.S. Environmental Protection 
Agency's self-audit policy statement applies to analyses, conclusions, 
and recommendations resulting from a self-audit, but excludes data 
obtained in the audit from the definition of an ``environmental audit 
report.'' 60 FR 66706, 66711. OSHA requests comment on its proposed 
definitions.
    The proposed policy also contains provisions designed to assure 
that employers who respond with prompt corrective actions will receive 
corresponding benefits in an OSHA inspection. These provisions would 
come into play when OSHA obtains a voluntary self-audit report, whether 
because the employer has voluntarily provided it to OSHA, as commonly 
occurs, or because OSHA has required production of the report.
    The proposed policy statement explains that OSHA will treat the 
self-audit report as evidence of good faith, not as evidence of a 
willful violation, provided that the employer has responded promptly 
with appropriate corrective action to the violative conditions 
identified in the audit. Accordingly, if the employer is responding in 
good faith and in a timely manner to correct a violative condition 
discovered in a voluntary self-audit, and OSHA detects the condition in 
an inspection, OSHA will not use the report as evidence of willfulness. 
A timely good faith response includes promptly taking diligent steps to 
correct the violative condition, while providing effective interim 
employee protection, as necessary.
    In addition, OSHA will treat a voluntary self-audit that results in 
prompt corrective action of the nature described above and appropriate 
steps to prevent similar violations, as strong evidence of the 
employer's good faith with respect to the matters addressed. Good faith 
is one of the statutory factors that OSHA is directed to take into 
account in assessing penalties. 29 U.S.C. 666(j). Where OSHA finds good 
faith, OSHA's Field Inspection Reference Manual (the ``FIRM'') 
authorizes up to a 25 percent reduction in the penalty that otherwise 
would be assessed. The FIRM treats the presence of a comprehensive 
safety and health program as a primary indicator of good faith. A 
comprehensive safety and health program includes voluntary self-audits, 
but is broader in concept, covering additional elements. OSHA has 
concluded preliminarily that a voluntary self-audit/correction program 
of the type described in this statement should be considered evidence 
of good faith. If the agency does not request an employer's voluntary 
self-audit reports during the course of an inspection, the employer 
subsequently may provide such reports to the agency as evidence of its 
good faith. OSHA requests comment on this issue.
    OSHA believes that the policy proposed here would provide 
appropriate positive recognition of the value of voluntary self-audits 
while simultaneously enabling the agency to enforce the provision of 
the Occupational Safety and Health Act effectively. In order to assure 
that the policy meets these dual goals most effectively, the agency 
seeks comments from employers, employee representatives, and other 
interested parties concerning, inter alia, the effect that the proposed 
policy would have upon employers' willingness to conduct voluntary 
self-audits, the effect that the policy would have upon the agency's 
ability to enforce the Occupational Safety and Health Act, and the 
manner in which the policy might be modified to meet these goals 
better. OSHA invites individuals and organizations to submit comments 
regarding the propriety of the self-audit policy in general, or 
regarding any specific issues concerning voluntary employer self-audits 
that are relevant to the effective and fair enforcement of the 
Occupational Safety and Health Act.

III. Statement of Proposed Policy on Voluntary Self-Audits

A. Purpose

    1. This policy statement describes how OSHA will treat voluntary 
self-audits in carrying out agency civil enforcement activities. 
Voluntary self-audits, properly conducted, may discover conditions that 
violate the Occupational Safety and Health Act so that those conditions 
can be corrected promptly and similar violations prevented from 
occurring in the future. This policy statement is intended to provide 
appropriate, positive treatment that is in accord with the value 
voluntary self-audits have for employers' safety and health compliance 
efforts, while also recognizing that access to relevant information is 
important to the Secretary's inspection and enforcement duties under 
the Occupational Safety and Health Act.
    2. This policy statement sets forth factors that guide OSHA in 
exercising its informed discretion to request and use the information 
contained in employers' voluntary self-audit reports. The policy 
statement is not final agency action. It is intended only as general, 
internal OSHA guidance, and is to be applied flexibly, in light of all 
appropriate circumstances. It does not create any legal rights, duties, 
obligations, or defenses, implied or otherwise, in any party, or bind 
the agency.
    3. This policy statement has three main components:
    (a.) It explains that OSHA will refrain from routinely requesting 
reports of

[[Page 54361]]

voluntary self-audits at the initiation of an enforcement inspection:;
    (b.) It contains a safe-harbor provision under which, if an 
employer is responding in good faith to a violative condition 
identified in a voluntary self-audits report, and OSHA discovers the 
violation during an enforcement inspection, OSHA will not treat that 
portion of the report as evidence of willfulness;
    (c.) It describes how an employer's response to a voluntary self-
audits may be considered evidence of good faith, qualifying the 
employer for a substantial civil penalty reduction, when OSHA 
determines a proposed penalty. See 29 U.S.C. 666(j). Under this section 
of the Act, a proposed penalty for an alleged violation is calculated 
giving due consideration to the good faith of the employer.

B. Definitions

    1. ``Self-Audit'' means a systematic, documented, and objective 
review by an employer of its operations and practices related to 
meeting the requirements of the Occupational Safety and Health Act.
    (a.) ``Systematic'' means that the self-audit is part of a planned 
effort to prevent, identify, and correct workplace safety and health 
hazards. A systematic self-audit is designed by the employer to be 
appropriate to the scope of hazards it is aimed at discovering, and to 
provide an adequate basis for corrective action;
    (b.) ``Documented'' means that the findings of the self-audit are 
contemporaneously recorded and maintained by the employer;
    (c.) ``Objective'' means that the self-audit is conducted by or 
under the direction of a safety and health professional who is 
competent to identify workplace safety and health hazards, given the 
scope and complexity of the processes under review.
    2. ``Voluntary'' means that the self-audit is not required by 
statute, rule, order, or settlement agreement. Voluntary self-audits 
may assess compliance with substantive legal requirements (e.g., an 
audit to assess overall compliance with the general machine guarding 
requirement in 29 CFR 1910.212).
    3. ``Voluntary self-audit report'' means the written information, 
analyses, conclusions, and recommendations resulting from a voluntary 
self-audit, but does not include matters required to be disclosed to 
OSHA by the records access rule, 29 CFR 1910.1020, or other rules.
    4. ``Good faith'' response means an objectively reasonably, timely, 
and diligent effort to comply with the requirements of the Act and OSHA 
standards.

C. OSHA Use of Voluntary Self-Audit Reports

1. No Routine Initial Request for Voluntary Self-Audit Reports
    (a.) OSHA will not routinely request voluntary self-audit reports 
at the initiation of an inspiration. OSHA will not use such reports as 
a means of identifying hazards upon which to focus inspection activity.
    (b.) However, if the agency has an independent basis to believe 
that a specific safety or health hazard warranting investigation 
exists, OSHA may exercise its authority to obtain the relevant portions 
of voluntary self-audit reports relating to a hazard.
2. Safe Harbor--No Use of Voluntary Self-Audit Reports as Evidence of 
Willfulness
    A violation is considered willful if the employer has intentionally 
violated a requirement of the Act, shown reckless disregard for whether 
it was in violation of the Act, or demonstrated plain indifference to 
employee safety and health. Consistent with the prevailing law on 
willfulness, if an employer is responding in good faith to a violative 
condition discovered through a voluntary self-audit and OSHA detects 
the condition during an inspection, OSHA will not use the voluntary 
self-audit report as evidence that the violation is willful.
    This policy is intended to apply when, through a voluntary self-
audit, the employer learns that violative conditions exist and promptly 
takes diligent steps to correct the volative conditions and bring 
itself into compliance, while providing effective interim employee 
protection, as necessary.
3. Good Faith Penalty Reduction
    Under the OSH Act, an employer's good faith normally reduces the 
amount of penalty that otherwise would be assessed for a violation. 29 
U.S.C. 666(j). OSHA's FIRM provides up to a 25% penalty reduction for 
employers who have implemented a safety and health program, including 
voluntary self-audits. OSHA will treat a voluntary self-audit that 
results in prompt action to correct violations found, in accordance 
with paragraph C.2. above, and appropriate steps to prevent similar 
violations, as strong evidence of an employer's good faith with respect 
to the matters covered by the voluntary self-audit. This policy does 
not apply to repeat violations.

D. Federal Program Change

    This policy statement describes a Federal OSHA Program change for 
which State adoption is not required; however, in the interest of 
national consistency, States are encouraged to adopt a similar policy 
regarding voluntary self-audits.
    This document was prepared under the direction of Charles N. 
Jeffress, Assistant Secretary for Occupational Safety and Health, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Washington, DC 
20210.

    Signed at Washington, DC, this 30th day of September 1999.
Charles N. Jeffress,
Assistant Secretary of Labor.
[FR Doc. 99-25956 Filed 10-5-99; 8:45 am]
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